HS2 ‘High-Speed 2’ is a white elephant of a transport project with little or no economic benefit to the UK as a whole and a hugely damaging economic impact on Scotland. Initially approved by Alastair Darling as Chancellor, HS2 aims to provide fast trains from London to Manchester and Birmingham but no further north. It will be especially damaging to intercity rail travel north of Edinburgh effecting Perth, Dundee and Aberdeen.

In early July, my article entitled “The hidden cost of the Union – HS2” explained the economic failings of the project and, in particular, pointed to the damage of HS2‘s massively spiralling budget on alternative capital expenditure in Scotland.

Read by tens of thousands of Scottish business people and attracting 4,400 ‘Likes’ the article calculated that the cost of HS2 had ballooned beyond an original estimated cost of £25.7bn to £48.2bn and rising. We later found out that the UK Department of Transport’s estimate did not include running stock, expected to add another £5bn at least.

Scotland supplies 9.9% of UK tax but only gets 9.3% of the UK’s budget to spend in return. This means that any major project in the UK is almost 10% funded by Scots. Depending on what cost estimate for HS2 you believe, that means that Scottish taxpayers will have to stump up either £5.3bn or up to £8bn for a train service that doesn’t come anywhere near Scotland and even has a negative real economic effect for England and is spiralling out of control financially.

The Scottish Government’s capital spend budget is being cut to around £2bn a year by the UK Government as part of its austerity measures that followed the Westminster’s system inability to properly regulate the volatile UK banking sector upon which the UK continues to have a critical over reliance.

So Scotland has to pay the equivalent of up to four years of our capital budget, which is supposed to be for schools, hospitals, communication and transport infrastructure in Scotland, on a London focussed vanity project that doesn’t even make sense for the people of England.

This week the leader of the No Campaign and the man in charge of the the UK economy in the lead up to the credit crisis, Alastair Darling is under pressure to explain the economic damage to Scotland of this unsustainable and unjustifiable project. In a moment of significant irony, he called for it to be scrapped:

He said: “It is time to revisit the case for HS2. It runs the risk of substantially draining the railway of money vital for investment over the next 30 years. My experience in government also makes me suspicious of big projects that can easily run out of control. Politicians are always excited by ‘visionary’ schemes”.

Err yes politicians like you Mr Darling! Business for Scotland welcomes this intervention but notes with amusement that Darling is a former Transport Secretary and was actually the Chancellor who approved the budget and economic case for the HS2 project in the first place!

It seems that Darling’s u-turn on HS2 is a first step in trying desperately to seek plausible deniability on the project’s runaway costs to Scotland and the rest of the UK.

This white elephant project is another powerful example of the hidden costs of union. And Scotland won’t have to pay for if we vote Yes to independence on September 18th 2014. In this case, aYes vote will deliver an instant saving of between £5.3bn to £8bn (five and eight thousand million pounds). That’s a lot of new schools, police officers, nurses, teachers or better roads.

Darling has realised that he, and therefore the No Campaign, is attached to an unravelling political controversy and so he is desperately seeking to distance himself from it. However, his eleventh hour conversion means very little to the project’s future, not least because the company behind HS2 claim they still have the backing of all the main Westminster political parties.

But its not just the cost that is the problem for Scotland. There are further practicalities. It will actually lengthen the time it takes to travel by train to London for most Scots. HS2 Ltd stated that the subsequent reduction on standard intercity trains will cause cuts in those services. Meanwhile, all direct trains services to London starting north of Edinburgh will be cancelled (Para 5). For travellers from Aberdeen for example this means changing at Edinburgh and then again at Manchester or Leads if you want to use HS2 to get to London. This will add up to an hour to travel times for many Scots, in some cases forcing them to fly instead, sometimes at more personal or business cost, and certainly at more cost to the environment.

Conclusion

Alistair Darling’s faux conversion to the growing anti-HS2 lobby will make no difference and is driven by political cynicism and position in the lead up to the referendum. Darling was asleep at the wheel as Chancellor when he approved HS2 and was not focussed on the cost or inconvenience to Scots travellers. Otherwise, presumably given his claimed understanding of politicians and vision projects, he wouldn’t have supported the project as Chancellor in the first place.

Business for Scotland calls for this white elephant of a project to be scrapped and for all the main Westminster focussed political parties to admit that it is one of many vanity projects that add to the ongoing unfair and unsustainable cost of the union to Scotland.

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before joining Business for Scotland full time first as its MD and then CEO he ran a small social media and sales & marketing consultancy.
With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).
Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and The Huffington Post.